SubscribeBiden Bill To Blame For Foreclosure Crisis
From the oft-surprising ABC News:
Should Biden Share Blame for Foreclosure Crisis?
Experts: Many Americans Lost Homes Due to a Bill Championed by Biden
By JUSTIN ROOD
August 28, 2008—Experts say hundreds of thousands of Americans may have lost their homes due to a bill championed by Sen. Joseph Biden, D-Del., Barack Obama’s vice-presidential running mate.
At least two studies have concluded that the United States’ foreclosure crisis was exacerbated by a 2005 law that overhauled the nation’s bankruptcy law. That conclusion is echoed by other experts, although the banking and credit industry disputes it.
Congressional Republicans drove the effort to pass the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. But Biden who has enjoyed hundreds of thousands of dollars in campaign donations from credit industry executives endorsed the measure early on and worked to gather Democratic support for it.
Biden’s early and vocal support was “essential” to the bill’s passage, said Travis Plunkett of the Washington D.C.-based advocacy group Consumer Federation, which opposed the measure. Biden “went out of his way to undermine criticism of the legislation,” and his efforts helped convince other Democrats to support the bill.
“Biden was a fairly strong proponent of that bankruptcy bill,” said Philip Corwin, a consultant for the American Bankers Association, which represents banks and lenders. However, Biden was “not in our pocket in any way,” he added.
Biden’s Senate office did not provide comment for this story.
Asked if the Obama/Biden campaign was concerned Biden’s record was a liability when discussing economic security, David Wade, a spokesman for the Obama/Biden campaign, said, “Barack Obama and Joe Biden have real solutions for struggling families in danger of losing their homes because of the Bush economy and abusive lending practices.”
BAPCPA “is directly responsible for the rising foreclosure rate since the end of 2005,” concluded a 2007 study by Credit Suisse. The law “increased foreclosures and the number of homes for sale,” echoed a July 2008 study by U.S. Treasury researcher David Bernstein. That study estimated the law had pushed foreclosures or forced sales on 200,000 homeowners since it went into effect, but noted that was a rough, “back-of-the-envelope” calculation…
The bill was backed by banks and credit card companies including MBNA, which is headquartered in Delaware, Biden’s home state. They wanted the bill because it would make it harder for Americans to use bankruptcy to avoid repaying credit card debt. MBNA executives had been Biden’s single largest source of campaign donations, and MBNA has employed Biden’s son Hunter as a company executive, lobbyist and consultant. The Obama campaign has said Hunter Biden did no work for MBNA on the bankruptcy bill. MBNA has since been bought by Bank of America.
Over the past two years, sub-prime mortgage borrowing and a weakening economy have pushed increasing numbers of Americans into dire financial straits. Under the old rules, many could have declared bankruptcy, shed much of their debt, restructured their mortgages and held onto their homes, according to experts and the two reports.
But the 2005 law Biden championed made it more expensive and more difficult to declare bankruptcy, experts conclude. That forced hundreds of thousands of distressed homeowners to sell their homes, or default on their mortgages, after which the bank would sell their former home, according to the studies. That flood of homes going up for sale in an already-weakening market further depressed home prices, according to the two reports, snowballing into the current crisis.
BAPCPA “increased home foreclosures, increased the dollar value of financial assets in default, and put additional downward price pressure on real estate markets,” concluded the Bernstein report. Bernstein conducted the report as an individual, not as a representative the Treasury Department.
You can bet that this errant report from ABC is the first and last we will ever hear about this.
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9 Responses to “Biden Bill To Blame For Foreclosure Crisis”
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August 28th, 2008 at 1:29 pm
You can bet that this errant report from ABC is the first and last we will ever hear about this.
Of course. The Obama/Biden campaign officials are figuring out which government body will best pressure ABC into retracting this story and only speaking praise about the Messiah and his faithful sidekick.
August 28th, 2008 at 1:43 pm
Mr. Limbaugh did just pick this up, so it might get some more coverage.
August 28th, 2008 at 1:49 pm
Anyone who questions TheOne is just a SlimeMerchant according to the official Obama website.
August 28th, 2008 at 2:46 pm
New Obama slogan:
“There is only one Messiah, Obama, and Biden is his prophet.”
August 28th, 2008 at 2:58 pm
Is it possible that ABC news, based upon several stories/reports (including the reporter incident below), may be moving towards the center politically? Just wondering…
August 28th, 2008 at 3:55 pm
Is it me or is there a striking resemblence between Jeff Durham’s “Walter”?
http://www.youtube.com/watch?v=olKE4JfeKnw
August 28th, 2008 at 5:28 pm
ABC better watch out, they will be next on the Obama’s “shut them up” list.
August 28th, 2008 at 7:41 pm
Well said, studmuffin! I am surprised that our beloved conservative commentators haven’t embraced the term “O’Biden” for the ticket—I think if we could get that into the mainstream it would prove strategically confusing and distracting. Go, O’Biden! (away, of course).
August 31st, 2008 at 7:56 pm
Hello, all, good to be back online!
There is a facet of the home foreclosure mess that I have not seen mentioned anywhere. It is somewhat esoteric in a legal sense, and so may not be newsworthy, but one that I believe is a major factor of the issue and to my mind indicates major misconduct on the part of the mortgage industry as a whole, and I believe it is something that Joe Biden should have done something about, if he is to be taken at his word.
I am not speaking of sub-prime lending or predatory lending practices. I will try to explain it as I understand it.
It is basically a corporation devised by several major mortgage lenders ostensibly as a record-keeping organization for all participating lenders, without, apparently, much attention from the but to my belief acts as a “shell”, to shield the lenders from litigation, make it easier for the lender to foreclose, and in general control the flow of information regarding property titles.
This corporation is known as Mortgage Electronic Systems, Inc. (MERS), and it is incorporated in Joe Biden’s home state of Delaware (as is 60% of all corporations listed on the NYSE).
First, let me provide some background information;
MERS was allegedly conceived as a improved means of keeping track of real estate titles.
Traditionally, the recording of titles has been handled by each county’s Register of Deeds. In order to find out who held the title, or note, to any particular piece of property in the United States, one need only go the the Register of Deeds of the proper county with a sufficiently accurate description of the property, and a small fee, and the RoD would provide you with a printout giving the name and address of the entity (person or corporation) who held the title to that property.
Understanding the complexities of titles has bcome very difficult over the years, though. In fact, some attorneys do nothing other than obtain and interpret title searches. This was the rationale for the creation of MERS; to simplify property title information.
Thus, MERS became for all the participating lenders, the named holder of the title. In the perfect world that MERS envisions, ANY title search would simply indicate the title holder as Mortgage Electronic Registration Systems, Inc.
What this means in practice is, that if any homeowner wishes to obtain ANY information regarding their mortgage, the could only get it through MERS. The County RoD would effectively be supplanted by MERS. The only factor preventing this is the lack of universal participation in MERS on the part of mortgage lenders.
This means that if a property owner wishes to interact at all with his lender, significantly in the case of litigation, he or she is often entirely dependant on MERS for information. In litigation, this is critical. You cannot effectively pursue or defend against court action unless you know who is on the other side of the “vs”.
There is an additional, and even more significant issue though; because MERS is the named holder of the title, it is capable of (and actually does) act IN PLACE OF the mortgage lender in activities such as foreclosures, and increasingly, the ORIGINATION of loans (i.e., MERS can write it’s own loans).
That is why in many states, if you check the foreclosure notices published in the paper, you will notice that a large percntage of the foreclosure action are brought in the name of MERS. This can be done without the need for MERS to even be licensed for business in the State where the action is brought. THis means that the state has little, if any, regulatory power.
This also tends to shield a lender from litigation.
In a true situation of which I have extensive knowledge, MERS foreclosed on a home without abiding by the terms of the mortgage contract. When the homeowner argued that the contract had been breached, a claim that would have come before any foreclosure action, the judge before whom the foreclosure whas heard stated that although the homeowner might have an cause of action against SOMEONE else (the judge had NO idea who really held the title), they did not have any real issue with MERS, and thus MERS could proceed with the foreclosure.
Personally, I do not know many homeowners who would feel up to pursuing a lawsuit AFTER they have lost their home and been forced to move.
I personally believe MERS poses a present threat to the property owner, as it gives the lender a considerable advantage in that they can directly control the flow of information regarding property titles, presents a shield in the case of litigation, and appears to be largely unregulated, even by the simple process of a states’ power to grant or withold licenses to do business within its’ borders.
The political kicker to all this is that MERS is based in the home state of the man that supposedly represents the interests of the “little guy”, and is the running mate of the man that proposes to relieve the woes of those who ave been wrongfully deprived of their homes.
Somehow, I don’t believe them.